Select Committee on Delegated Powers and Deregulation Tenth Report


TENTH REPORT

14 January 1998


  By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.

SOCIAL SECURITY BILL

Introduction

  1.    This is a major bill which contains some controversial provisions and it is these, rather than the delegated powers, which will attract most attention. There is, however, a large number of delegated powers in the bill. In particular, Part I of the bill aims to set in place a framework for decision-making, rights of appeal and new appeals arrangements. It makes provision for the simplification of decision-making and appeals in social security, child support and vaccine damage payments cases. Existing statutory arrangements are repealed and replaced by a series of regulation-making powers. The bill constitutes an overhauling of much of the Social Security system, and the consequence is that arrangements which are well known and seen as fair will come to an end. For this reason it is important to consider in some detail the regulation-making powers which will result in new, and as yet untested, arrangements.

  2.    The Department's exceptionally helpful explanatory memorandum, which lists the powers and explains the background to the changes made by the bill, states that within the framework established by Part I of the bill "it is intended that the detail will be set out in regulations and guidance". For this reason the Committee has scrutinised the aspects of the bill relating to tribunals and rights of appeal with special care; the House may also wish to examine these provisions in similar detail at Committee stage.

  3.    The Committee received written evidence on this bill from the Child Poverty Action Group (CPAG) and from the National Association of Citizens Advice Bureaux (NACAB). The Committee is grateful to these two organisations for alerting it promptly to the delegated powers in the bill which caused them concern; both the memoranda are printed in the annex to this report. CPAG support NACAB's comments and add some comments on other provisions of the bill. We do not refer to all these additional comments in this report as we regard them as requests for information about the way it is intended to use powers and we have no concerns about those powers to draw to the attention of the House. We do not discuss all the many powers but only those which we found to raise issues which caused us concern.

  4.    The bill contains no Henry VIII powers. Apart from the commencement power and one power subject to affirmative procedure, all powers are subject to negative procedure.

Legally qualified chairmen and "sifting" appeals

  5.    Clause 6 provides for the Lord Chancellor to constitute a panel of persons to act as members of appeal tribunals. Subsection (3) provides that the panel shall include persons possessing such qualifications as may be prescribed by regulation made by the Secretary of State with the concurrence of the Lord Chancellor. At present there is a statutory requirement that the chairman of an appeal tribunal should be legally qualified. The Minister in charge of the bill in the Commons told the Commons Standing Committee that some appeals would require a legally qualified chairman but such a requirement was not suitable for inclusion in primary legislation. NACAB question whether it is wise to leave so important a matter to subordinate legislation, and comment in the same terms on the equivalent provision for Scotland (clause 7). Regulations under clauses 6 and 7 do not require the lists of those eligible to serve on appeal tribunals to include amongst the qualifications an appropriate legal qualification. In the Committee's view, however, it is inconceivable that an appropriate legal qualification should not be included within the list.

  6.    The Committee regards clause 8 - constitution of appeal tribunals - as a far greater cause for concern. This clause replaces the existing requirement in sections 41, 43 and 50 of the Social Security Administration Act for all appeals to be heard by three-person tribunals with provision for one, two or three-member tribunals. This is an important change, and the Department's explanatory memorandum (paragraphs 26-33) explains the Government's intentions for the composition of tribunals. The memorandum (paragraph 29) explains, for example, that an appeal on a child support maintenance assessment will always go to a tribunal including a legally-qualified panel member (who will be appointed chairman if the tribunal consists of more than one member), as such cases often raise complex legal issues. There is, however, nothing in the bill about the qualifications of the person from the panel who is to take the chair. That could be the subject of a regulation under clause 8(3). For the past two decades there has been a requirement that the chairman of an appeal tribunal should be legally qualified, and the provision in this bill that Ministers will have discretion in this matter is thus a considerable change.

  7.    Clause 8(3)(c) allows regulations to lay down "the procedure to be followed in allocating cases among differently constituted tribunals". NACAB see that as allowing administrators to label an appeal as "hopeless" and so send it to "a tribunal of one person untrained in law" whereas at present tribunals are of three members with a legally qualified chairman. The Secretary of State may have that intention and may regard troubling three persons with a hopeless case as an extravagant use of resources.

  8.    In this context it is necessary to refer to Schedule 1 which is dependent on clause 8. Paragraph 11 allows regulations to delegate certain functions of appeal tribunals to officers authorised by the Secretary of State. Paragraph 11(2) makes it clear that regulations may allow officers to make "determinations that would have the effect of preventing an appeal, application for leave to appeal or reference being determined by an appeal tribunal". NACAB see this as another example of the need for "a tightening of the drafting .... to strike an appropriate balance between the DSS's[1] need for flexibility and the claimant's right to be protected from arbitrary power".

  9.    There are thus some major causes for concern about the provisions in clause 8. The House may therefore consider that clause 8 (and with it paragraph 11 of Schedule 1) raises issues of such importance that affirmative procedure would be appropriate. In the Committee's view, that would provide sufficient protection against the possible dangers in these provisions.

Decisions superseding earlier decisions

  10.    Clause 11 gives the Secretary of State power to make a decision which supersedes one made under Clauses 9 and 10 of the bill, other than discretionary Social Fund decisions, or one made by an appeal tribunal or Commissioner. A new decision may be made in response to an application or at the Secretary of State's own initiative. These powers may seem wide, but the explanatory memorandum (paragraph 52) explains that they will be used for only two limited purposes. Provided that the Minister is prepared to give an undertaking to this effect, the Committee therefore considers that negative procedure is appropriate.

Withdrawing right of appeal

  11.    Clause 13(2) allows the Secretary of State to prescribe by regulation circumstances in which the general language of the clause is not to confer a right of appeal. NACAB see this as an unqualified power to withdraw the right of appeal. At a first glance, the power seems wide-ranging, but the memorandum (paragraph 63) explains that this power complements the power in paragraph 8 of Schedule 1 and that the aim is to "put beyond doubt, if this should become necessary, that individuals have no right of appeal on matters other than claims and awards, or those decisions covered by Schedule 3, in the event of future developments in the benefits system" and to ensure that rights of appeal are not given in respect of decisions on administrative matters where no right of appeal currently exists. The Department's memorandum expands on this in paragraph 71 which makes it clear that there is no intention to remove rights of appeal in respect of "outcome" decisions but only to prevent appeals on "peripheral issues" (such as the day of the week on which benefit is to be paid).

  12.    The Committee sees no objection to the grant of the powers to be used in the way proposed. It is, however, concerned at their apparent width. The joint effect of clause 13(2) and paragraph 8 of Schedule 2 is to allow any right of appeal relating to an "outcome" decision to be extinguished.

  13.    The Committee does not consider that affirmative procedure is the appropriate answer to its concerns about clause 13(2) (and the corresponding provision in paragraph 8 of Schedule 2). It is arguable that primary legislation should establish the essential rights of appeal in any area of the law. The Committee sees no objection to a power to confer additional rights of appeal (as in paragraphs 9 and 28 of Schedule 3). But as the bill stands there are no rights of appeal which could not be removed by regulations under clause 13(2) or paragraph 8 of Schedule 2. The Committee wishes to draw attention to this point, and invites the House to consider whether it is right that Ministers should have so wide a power to deny appeals from their own decisions. The House may consider that the remedy is to amend the bill to list the "current" outcome decisions which are appealable and to exclude these from the operation of power to deny rights of appeal: the power to confer additional rights of appeal would stay as proposed in the bill.

Suspension of payments pending appeal

  14.    Clause 22 allows regulations to provide for suspending payments of benefit in prescribed circumstances. One example is suspension while an appeal is pending in that case (clause 22 (2)(c)) or in a parallel case (clause 22 (2)(d)). There is a similar power to suspend payments of housing benefit or council tax benefit (clause 35). The House will no doubt wish to debate this clause with care, but it can be argued that the point of principle will be decided by the provisions of the primary legislation and the regulation-making power does not raise additional issues. If concerns expressed about this clause are not satisfied in debate then the House may wish to consider whether this power should be subject to affirmative procedure.

Clause 64

  15.    This clause is mentioned here only because it contains the sole provision for affirmative procedure in the bill. The clause confers power to alter the percentage rates of Class 1B contributions and in the Committee's view affirmative procedure is appropriate.

Power to reduce child benefit for lone parents

  16.    Clause 70 enables regulations to be made to provide for lone parents to receive the same rate of child benefit for their eldest child as couples with children. The explanatory memorandum explains that this provision is necessary because section 145(4) of the Social Security Contributions and Benefits Act 1992 specifically prevents regulations from reducing an existing rate of child benefit. This is an exceptionally controversial provision, and there has been considerable debate as to how it will work in practice. Given the great significance of this power, the House may wish to consider whether the bill should be amended to allow for the affirmative resolution procedure.

Schedule 5

  17.    This schedule confers power to make regulations about the procedure to be followed in connection with decisions of the Secretary of State, a Commissioner or an appeal tribunal. Paragraph 3 allows regulations to make provision as to the striking out of proceedings. NACAB state that this is a dangerous change from the present position where the only circumstances where proceedings can be struck out is where the Independent Tribunal Service finds that there has been "want of prosecution". The Department's memorandum discusses this power and gives examples of how it would be used, arguing that "the level of technical detail" involved in defining these additional categories "makes this suitable for secondary legislation". This may be so, but "striking out" is a draconian process which denies the claimant access to a hearing. So the House may wish to consider whether affirmative procedure is needed to ensure that the power will only be used to allow "striking out" in cases where there would be general agreement that use of such a power would be appropriate.

  18.    NACAB also question paragraph 5 of this Schedule which allows regulations to establish time limits for producing evidence or making any application, reference or appeal, and they contrast this with clause 72 which fixes time limits for the backdating of benefits. The clause is dealing with a very different matter and in the Committee's view the unease about this particular point does not appear to be justified. The prescription in subordinate legislation of time limits for proceedings in court or before tribunals is common.

Recommendation

  19.    There is an exceptionally large number of delegated powers in this bill, and it is difficult to strike the right balance in relation to some of these powers. The Committee is conscious of the need to allow flexibility, and has therefore limited its comments to those delegated powers which it regards as being of exceptional importance. Some of the delegated powers in the bill break important new ground, and whilst there is no reason to question Ministers' intentions, there can also be no guarantee that the powers will always be used as is currently proposed. The House may therefore wish to consider whether affirmative procedure is needed for regulations made under clauses 8 and 70, paragraph 11 of Schedule 1 and paragraph 3 of Schedule 5. In the case of the provision in clause 13(2) withdrawing the right of appeal, and the corresponding provision in paragraph 8 of Schedule 2, in the Committee's view even the affirmative procedure would not give the certainty required. The House may therefore wish to consider amending the bill to put the vital provisions in the bill itself and to limit the powers accordingly.

  20.    There is nothing else in the bill to which the House's attention need be drawn.


1   Department of Social Security. Back


 
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